MCA today vide order no. S.O. 3388(E) dated 14.12.2015 appointed 14th December, 2015 as the effective date for Section 13 & 14 of the Companies (Amendment) Act, 2015. The said Sections are as under:

• Section 143:Powers and Duties of Auditors and Auditing Standards: Auditor to report any Fraud involving such amount as prescribed;  found by him in the Company to the Central Government, Fraud of a Lower amount: report to the Audit Committee/Board

{Section 143 (12) Notwithstanding anything contained in this section, if an auditor of a company, in the course of the performance of his duties as auditor, has reason to believe that an offence involving fraud is being or has been committed against the company by officers or employees of the company, he shall immediately report the matter to the Central Government within such time and in such manner as may be prescribed.

(12) Notwithstanding anything contained in this section, if an auditor of the company in the course of performance of his duties as auditor, has reason to believe that an offence of fraud involving such amount or amounts as may be prescribed, is being or has been committed in the company by its officers or employees, the auditor shall report the matter to the Central Government within such time and in such manner as may be prescribed:

Provided that in case of a fraud involving lesser than the specified amount, the auditor shall report the matter to the audit committee constituted under section 177 or to the Board in other cases within such time and in such manner as may be prescribed:

Provided further that the companies, whose auditors have reported frauds under this sub-section to the audit committee or to the Board but not reported to the Central Government, shall disclose the details about such frauds in the Board’s Report in such manner as may be prescribed.”

Substituted vide Companies (Amendment) Act, 2015 dated 25.05.2015}

• Section 177: Audit Committee: To bring the Act in lines with the Listing Agreement, Audit Committee given powers to give Omnibus Approvals for Related Party Transactions.

{Section 177(4) Every Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall, inter alia, include,—

(i) the recommendation for appointment, remuneration and terms of appointment of auditors of the company;

(ii) review and monitor the auditor’s independence and performance, and effectiveness of audit process;

(iii) examination of the financial statement and the auditors’ report thereon;

(iv) approval or any subsequent modification of transactions of the company with related parties;

Provided that the Audit Committee may make omnibus approvals for related party transactions proposed to be entered into by the company subject to such conditions as may be prescribed

Inserted vide Companies (Amendment), Act, 2015 dated 25.05.2015 

(v) scrutiny of inter-corporate loans and investments;

(vi) valuation of undertakings or assets of the company, wherever it is necessary;

(vii) evaluation of internal financial controls and risk management systems;

(viii) monitoring the end use of funds raised through public offers and related matters.}

The said Order can be accessed at the following link: Order No. S.O. 3388(E) dated 14.10.2015